Stochastic Model for Optimal Selection of DDG by Monte Carlo Simulation

Decentralized distributed generation (DDG) is considered as a viable option for electrification of rural areas where there is no access to electric network. An approach has been presented in this paper for optimal selection of micro gas turbine based distributed generator meant for standalone application. The decision support model incorporates the stochastic nature of opportunity cost of capital and uncertain gas fuel price scenario. Expected net present value (NPV) of all future costs is estimated for a set of DDGs by Monte Carlo simulation and optimal DDG unit having minimum life cycle cost has been arrived at. A numerical case example has been illustrated in this paper.